Payroll tax, licenses and permits brought city 40% over estimates; clerk-treasurer cites new jobs, more business

By Andrea Richard

University of Kentucky School of Journalism and Telecommunications

The City of Midway saw big increases in its two main revenue sources in the last fiscal year, according to an audit presented to the city council Monday night.

The audit for the year ended June 30 showed revenue from licenses and permits was 43 percent above budget, and occupational taxes were 42 percent over budget.

The audit shows $194,720 was budgeted for licenses and permits, and the city took in $277,596. City Clerk-Treasurer Phyllis Hudson told the Messenger that the increase reflects larger-than-expected revenue from alcohol licenses, business permits, insurance licenses and the Midway Fall Festival. 

Hudson said the even larger dollar increase in the 2 percent occupational tax reflects new jobs at The Homeplace at Midway, the new senior-living community across from Midway College, and the McDonald’s in the Green Gables development in the southeast quadrant of the Interstate 64 interchange. Each employs about 45 people.

The occupational tax generated $396,618 in fiscal 2015, compared to a budget expectation of $280,000, a boost of $116,918. The city ended the year with a $567,000 cash balance, an increase of $338,183.

CPA Debbie Smith of the Mountjoy Chilton Medley accounting firm presented the numbers to the council.

Council member Sara Hicks asked Smith if the city’s “nice numbers” meant Midway was financially strong, or if the city “[wasn’t] taking care of business.”   

Smith said most cities try to keep “three to four operating months of expenses as a rule of thumb.” Last year, the city’s expenses totaled about $788,000, but its revenues were about $1 million.

Smith told the council that they ended the year with $420,000 in CDs, giving them a strong cash and asset position. Even with adding a pension liability, required by federal law, the city still had a good, strong net position, Smith said.

Smith’s one recommendation to the council was to update the ratings of streets’ condition. “You’re supposed to every three years,” Smith said. “It’s been four or five.”

Speed limit sign: The council voted to spend $3,170 for a speed limit sign to collect data on the city’s traffic. The move grew out of concern over speeding on Stephens Street at the Brand Street intersection.

“We’re going to have to collect [the data] ourselves because no one else does it,” said Council Member Bruce Southworth, who lives near the intersection.

Mayor Grayson Vandegrift said the data will be used to show trouble spots to police and state highway officials. “Sometimes you have to take care of your own problems in your community,” he said. “We can use it to say this is what we have . . . verifiable data.”

Southworth said the sign not only flashes the speed of a vehicle, but also collects the number of cars traveling the street, and how much the cars are going above the speed limit. The city can set the sign to a specific limit, and it will flash red if drivers travel above the set speed.

After Southworth presented the council with the price tag, Hicks asked, “We hire the Versailles police to perform a job for us in Midway. Why are we not able for our employees to do this service for us?”

Vandegrift said he did not have an answer to Hicks’ question, but he’s learning “more and more that you don’t want to burn bridges with the state,” which has not been as responsive to city requests for help as city officials would like.

Other business: After the council approved the mayor’s appointment of Council Member Libby Warfield to the Veterans Committee, Warfield said she wanted to buy two wreaths for each of these holidays: Veterans Day, Memorial Day, Christmas and the Fourth of July. The council agreed to two each for the former pair, and one each for the latter pair.

The city’s older fire engine sustained damage after the driver backed into a rail. The truck was being used to clean the streets after the fall festival. Vandegrift said he’s “trying to figure out whether to pay out of pocket [for the damages] or to go through insurance,” which might result in a premium increase. The body-work estimate ranges from $12,000 to $14,000.